La. lawmakers revisit film tax credit program

Apr. 26, 2009

Written by

Stacey Plaisance

The Associated Press

Lawmakers' views

The Times Editorial Board recently sent local lawmakers a questionnaire. Below are excerpts of their answers to the following questions: "Should existing tax breaks for film, digital media and research be extended, as proposed by the governor?" "Should tax breaks be expanded, such as those offered to film makers, to keep pace with other states?"State Sen. Robert Adley is sponsoring a bill to increase the state's production incentive from 25 percent to 30 percent. Gov. Bobby Jindal has said he will support legislation to keep the tax credit at 25 percent through 2012. n "I support the governor's position." "” Sen. B. L. "Buddy" Shaw, R-Shreveport.n "I support the tax breaks Louisiana has provided to encourage the film and digital media industry to create jobs and opportunities here in our state. However, the Legislature may need to look at an increase over and above Gov. Jindal's proposal in order for Louisiana to remain competitive with other states whose incentives are more attractive economically." "” Rep. Thomas Carmody, R-Shreveport.n "Yes, less emphasis on infrastructure and more on production. Making films creates economic impact "” not warehouses." "” Rep. Henry Burns, R-Haughton.n "Yes, however, film credits need to increase to 30 percent. Remove the infrastructure credits." "” Rep. Patrick Williams, D-Shreveport.n "Eliminating a proposed phase-out of the Digital Interactive Media Production Tax Credit, which is aimed at attracting video game development, animation and special effects projects, could draw other companies to the state. "» We should keep our state incentives to attract high paying, high tech jobs." "” Rep. Barbara Norton, D-Shreveport.n "Increasing Louisiana's tax credit to 30 percent is a temporary fix before another state tops that. The result will be like the dog chasing his tail. Each state will raise its credits until the tax credits exceed the return and all will be in vain. In addition to tax credits, Louisiana must provide improved infrastructure, such as airports, and specialized training. As it did in 2002, Louisiana must think outside of the box." "” Sen. Robert Adley, R-Benton.n "I favor a 30 percent tax for film production and a decrease of the 10 percent on infrastructure credits." "” Rep. Jane Smith, R-Bossier City.n I do not think tax breaks or the expansion of tax breaks alone creates a sustainable and viable industry. Many states have followed the lead of Louisiana and have enacted tax breaks of their own that are as competitive if not more so than Louisiana. To truly bolster this industry and ensure that it remains a solid investment for the state of Louisiana, serious focus should also be placed on creating a strong work force to complement this industry." "” Rep. Wayne Waddell, R-Shreveport.

LPB to air opening live

Louisiana Public Broadcasting will air live coverage of Gov. Bobby Jindal's address to the joint session of the Louisiana Legislature at 1 p.m. today.LPB will also kick off its daily Capitol Beat reports at 6:57 and 9:57 p.m. today with a repeat Tuesday morning at 5:26 a.m. Today also marks the return of LaTV. LPB, the Legislature and the Louisiana Cable Telecommunications Association are once again joining forces to provide weekday coverage of the Legislature on cable stations around the state through LaTV. The regular LaTV coverage will air from 2 to 6 p.m. Monday through Friday on cable companies around the state (check with your cable provider for the station in your market).

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NEW ORLEANS — How much is it worth to keep the TV and movie industry humming in Louisiana?

Lawmakers will tackle that question as they decide whether to keep or expand incentives designed to make Louisiana competitive as an alternative to Hollywood.

If the Legislature takes no action in its session opening today, the current 25 percent tax credit for movie and TV show makers will drop to 20 percent next year and 15 percent in 2012. That's a scenario those heavily invested in the industry say would be disastrous.

"If it's reduced, it will kill the film industry in this state," said Daniel Forman, president of a new multimillion-dollar studio in Harahan. He said he's counting on the state to keep the incentive at 25 percent or raise it to compete with states such as Georgia, which has bumped its incentive to 30 percent.

Gov. Bobby Jindal has said he will support legislation to keep the tax credit at 25 percent through 2012. Several legislators have pre-filed bills to do so.

So far, there appears to be no opposition to keeping the 25 percent credit. But a move to raise it might get an icier reception, said Greg Albrecht, chief economist for legislative fiscal office.

"We're spending big money to do this, and we're putting a lot of public resources to build this industry here," Albrecht said. "Is it working? Yeah, it's working. But are we making more money than we're giving up? No, not even close."

Albrecht said while many tout jobs the program helps create, there are concerns about the cost to the state. The credit covers 25 percent of a production company's in-state expenses and 35 percent of its in-state labor.

A state-commissioned report released earlier this year that covers the period from 2002 — when Louisiana began offering film tax credits — through 2007 shows the state has yet to make back what it pays out annually in the program.

In 2007, the latest year for which figures are available, Louisiana spent $115 million on credits and received $14.6 million in state taxes and fees from production companies.

The report shows more than 65 film and TV productions spent $429 million in Louisiana that year. Roughly half, or just over $200 million, was spent on payroll for Louisiana residents who served as extras and crew members. The rest went to goods and services such as costumes, equipment, trucks and lighting.

That's millions of dollars that would not have otherwise been spent in Louisiana, said Rep. Hunter Greene, R-Baton Rouge, chairman of the House Ways and Means Committee, which considers tax credit bills.

"You get nothing if they're not here," Greene said. "So the state is getting some benefit."

Forman agrees, and said lawmakers should keep in mind the industry's "ripple effect." He said restaurants, courier services, fuel suppliers and hotels and among the many nonfilm businesses that benefit when movies and TV shows are shot in Louisiana.

This spillover into other industries had an estimated economic impact of more than $700 million for 2007 alone, according to the state report.

Albrecht, who contributed to the report, said the figure is overzealous, though he acknowledges companies are seeing benefits.

"It's been wonderful for me," said Kynisha Jones, who owns a cleaning service in New Orleans and is working on the set of the Disney television show "The Imagination Movers."

Jones said she started her business with just one employee almost four years ago and after she began serving film and television production in 2008 she added three more workers.

"When productions are in town, we do really well," she said.

Tax incentives aside, Louisiana's has other advantages for production companies, Albrecht said.

"We're a good, efficient place to shoot, and we know what we're doing," he said. "The ultimate goal is to have a self-sustaining industry here, and have it because the facilities and labor force are good here, not because you're paying them to be here."

Interesting backdrops such as the French Quarter, plantation homes, swamps and Spanish moss-draped forests help, too.

At least 10 films are expected to shoot segments in Louisiana in the next few months, including big-budget productions such as "The Expendables" and "Jonah Hex."